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TD Ameritrade: Its Fiscal 3Q17 Beats in Earnings and Revenue

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Part 4
TD Ameritrade: Its Fiscal 3Q17 Beats in Earnings and Revenue PART 4 OF 8

TD Ameritrade’s Projected Operating Expenses for Fiscal 4Q17

Operating expenses

TD Ameritrade Holding (AMTD) saw an increase in its total operating expenses for fiscal 3Q17 compared to fiscal 3Q16. In 3Q17, those expenses were $537.0 million compared to $490.0 million in 3Q16, which reflects a rise of 10.0%. The increase was mainly due to a substantial rise in employee compensation and benefits-related expenses.

TD Ameritrade’s Projected Operating Expenses for Fiscal 4Q17

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The rise in professional services–related expenses in fiscal 3Q17 compared to fiscal 3Q16 also contributed to the rise in total operating expenses in 3Q17. Those expenses were $67.0 million in 3Q17 compared to $47.0 million in 3Q16, reflecting a 43.0% rise.

According to top management, the company should report total operating expenses of $530.0 million to $540.0 million in fiscal 4Q17, mainly due to costs related to the acquisition of Scottrade and several other strategic growth initiatives.

EBITDA margin

TD Ameritrade Holding’s (AMTD) EBITDA (earnings before interest, tax, depreciation, and amortization) margin was 47.0% as of June 30, 2017. Other brokerage giants (XLF) reported the following EBITDA margins as of June 30, 2017:

  • Charles Schwab (SCHW): 44.2%
  • E*Trade Financial (ETFC): 66.6%
  • Interactive Brokers Group (IBKR): 47.9%
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